Medical devices manufacturer Covidien has closed its $860m buyout of the Israeli company Given Imaging, providing the company additional scale and scope to serve a significant medical specialty in the multibillion dollar global gastrointestinal (GI) market.

This acquisition boosts the company’s strategy to comprehensively address key global specialties and procedures.

Under terms of the agreement, Covidien has acquired all outstanding Given shares for $30 per share or an aggregate consideration of approximately $860m, net of cash and short-term investments acquired.

Covidien Medical Devices & US group president Bryan Hanson said: "We are committed to providing clinicians with more accurate and efficient diagnostic technologies to help achieve better outcomes for patients."

Covidien said that Given Imaging’s technology now gives it one of the broadest portfolios for visualising, monitoring and detecting abnormalities in the digestive system.

"We are committed to providing clinicians with more accurate and efficient diagnostic technologies."

The company’s broad portfolio includes the PillCam, a minimally invasive, non-sedation, swallowed optical endoscopy technology for the small bowel, esophagus and colon.

In total, Given Imaging has seven product lines across 21 GI disease states and also offers industry-leading GI functional diagnostic solutions including ManoScan high-resolution manometry, Bravo capsule-based pH monitoring, Digitrapper pH-Z monitoring and SmartPill motility monitoring systems.

Covidien will report the Given Imaging business within the Advanced Surgical revenue reporting line and the company expects Given Imaging will add between $40 and $50m per quarter in incremental revenue.

In 2012, Covidien acquired three Israeli medical device companies- respiratory monitor developer Oridion for $346m, bronchial tubes endoscope maker superDimension for $300m, and hernia mesh company PolyTouch for $40m.

According to GlobalData estimates, the endoscopy visualisation systems market in the US was valued at $463m in 2012 and is expected to grow at a CAGR of 4.2% to reach $616m by 2019.

Image: PillCam Colon video capsule. Photo: courtesy of Business Wire/ Covidien plc.